Privatization proceeds are not non-tax revenue but are financing item to be used to finance the budget deficit and thereby reducing debt, said Dr Hafeez Pasha while talking to Business Recorder.
According to the Privatization Ordinance 2000, (90 percent) privatizations proceeds are used for debt servicing and (10 percent) poverty alleviation. Informed sources in the Ministry of Finance on condition of anonymity told BR that the government would have to legislate to make it a revenue account but the passage of legislation requires approval from both houses of parliament however the government does not have the required numbers in the upper house of parliament (Senate) to pass any legislation.
The Privatization Ordinance was introduced in 2000 by the government of Pervez Musharraf, extended protection through the 17th Amendment in 2003, and further amended by 2016 to ensure transparency in the process through audit of the proceeds by the Auditor General of Pakistan.
The law allows the Commission to withdraw from the privatization proceeds to contribute to the Commission's account as may be needed by it from time to time but only to supplement the other resources therein if and to the extent necessary.
Advisor to Prime Minister has recently stated that government was expecting Rs 1,000 billion on account of non-tax revenue with Rs 300 billion as privatization proceeds from the sale of two RLNG power plants, Rs 200 billion from cellular licenses of telecommunication companies and Rs 400 billion from State Bank of Pakistan (SBP) profit and other projected inflows under the head.
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